New listings outdo FTSE in last two years

Ben Southwood
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NEW market entrants outdid FTSE 100 stalwarts over the past two years, according to data out yesterday.

The share price of 10 firms who joined the main market with an initial public offering (IPO) between 2011-12 rose 19.2 per cent by the end of January 2013, Deloitte said, while the market as a whole rose only 8.8 per cent in the same period.

This marks a reversal of the story seen in 2010, the accounting giant said, when the 12 firms joining the main market did 41.4 per cent worse than the FTSE 100 overall.

Deloitte equities head John Hammond said a smattering of IPO horror stories should not drive investors away from firms listing publicly for the first time.

“There is a misconception that IPOs are a bad investment and that it is better to keep your money in already listed stocks,” Hammond said. “2010’s results perpetuated this view. Our analysis shows that the picture is changing as recent IPOs have performed 11 per cent better than the FTSE.”

This data comes at a bad time for the London IPO market, which saw just four main market share issues last year – the lowest total since 2009.